Application Management Case Study

Anderson Hay & Grain Extends Its Oracle Application to Its Roots

Established by its family founders more than a half a century ago, Anderson Hay & Grain has become the leading US exporter of animal forage. Its reputation for the highest quality products has made Anderson the preferred supplier for dairies in Japan and Korea, horse tracks in Hong Kong, and horse lovers in the Middle East. Anderson has more than 300 employees, with more than 500 employed during its seasonal peak. Its staff is headquartered in Ellensburg, Washington, and its buyers are located across the western United States.

A Great Idea Gets Growing

Every thriving business begins with a great idea. For Ron Anderson, cofounder of Anderson Hay & Grain, the vision was clear: turn the local business of producing animal feed into a global enterprise. Western farmers grow some of the finest Timothy and alfalfa hay and grass straw in the world. Ports in Portland, Oregon; Tacoma and Seattle, Washington; and Long Beach, California, offer ready access to Pacific Rim nations such as Japan, where farmers produce high-quality dairy and meat products (like famous Kobe beef) but lack space to grow forage. The question was how to bring product and customer together across the Pacific.

High-value imports like computers, televisions, and clothing arrive at US ports protected in steel containers the size of truck trailers. Because imports exceeded exports, many containers left port empty. Where others saw a waste of money, Anderson saw opportunity. Shippers were paying to return the containers, empty or not, and they were happy to ship containers filled with Anderson’s forage products at rates the farmers in Japan could afford. “They felt they could offer us cheap rates and that our products would provide good ballast,” says Nathan Mirro, IT director for Anderson.

From its start with dairy farmers, Anderson has expanded to the Japanese beef industry and to other Asian markets: Korea, Taiwan, China, Vietnam, Malaysia, and Singapore. Today Anderson Hay & Grain exports 22,000 containers of feed each year. In addition, the company has recently expanded into the Southwest, procuring alfalfa from growers in California, Utah, Arizona, and New Mexico.

While the business model might seem simple, Anderson’s operation is remarkably complex. Each day, hundreds of containers must be received, loaded with the right product, and then shipped and tracked to their destinations. The quality of each shipment must be tracked as well, from planting through delivery. Then there are the vagaries of global business: rising and falling energy costs, varying market demand, fluctuating exchange rates, and the list goes on. “We have had people come in and say ‘Hay company? How complex can that be?’” Mirro says. “We are very complex when it comes to a logistics model and to matching the quality of product with the customer’s needs.”

Utilizing IT Services to Support a Global Business

To manage the many variables, it’s critical to have solid, current data available. But Anderson Hay’s expanding business made demands on its information infrastructure that a home-grown IT system could not meet. Change was needed and Anderson chose Oracle E-Business Suite. Anderson also moved to a new IT support model. The Oracle suite would be managed not by the Anderson IT team, but by an outsourcing company. “We wanted to focus on what do we do well: growing and acquiring the right forage for our customers, ensuring that it’s manufactured to their specs and delivered on time throughout the year,” Mirro says.

While the software suite delivered results for Anderson, the initial service provider did not. Mirro looked at all the options, from bringing the work back in house to using a different outsource vendor. Reliability and security were key criteria. “If the Oracle suite should fail,” Mirro says, “it would absolutely shut our business down.” After interviewing and visiting several competitors, Mirro chose AT&T to host and manage the Oracle E-Business Suite business application software and subsequently implement an enhanced version of Oracle Business Intelligence Enterprise Edition. This gives users a “dashboard” view of up-to-the-moment business status. With an IT team numbering just two people, Mirro depends heavily on his AT&T support team. “I don’t have time to chase issue after issue,” he says. “I really need to know that when I have communicated a problem, I am understood and that they are going to follow up. We can then focus on our core business, which is selling hay and straw products.

We wanted to focus on what do we do well: growing and acquiring the right forage for our customers, ensuring that it’s manufactured to their specs and delivered on time throughout the year.

Nathan Mirro, IT Director, Anderson Hay & Grain

“Oracle is big, but we want it to be treated as small in our business,” he continues. “AT&T has made it a small thing. Now I don’t have to sweat the small stuff, because they are sweating it for me.”

Data from the Roots of the Business

Mirro next wanted to extend the functionality to the field and to purchasing. As buyers for Anderson Hay signed contracts with producers across the West, they entered product quality grades, volumes, delivery schedules, prices, and dozens of other key details in multipart paper forms with over 50 fields in all, plus notes. They then sent the agreements to headquarters, where the data was manually entered in the Oracle applications. Forms could be incomplete, delayed, or lost. Some buyers would enter into handshake agreements with the producers, planning to fill out their contract forms at a later time. Errors and oversights would result, and the possibility of damage to Anderson Hay’s image was a serious concern, especially as the company worked to build its reputation among new producers throughout the West.

“Getting that information in was always a challenge during the frenzy of harvest,” Mirro says. “We’re buying in May through September to last us through June or July of the following year. We’re committing a lot of dollars in a very short period of time. It’s a real coordinated dance of commitments, down payments on products, cash turns, and the speed of product movement. All that information was on a piece of paper, being sent by courier up to our corporate headquarters for entry into our Oracle system.”

As managers met for Monday status reviews, they had to worry that key data might be missing. “There was always a gap you had to worry about,” Mirro says. “Is there a bunch of business out there that we just don’t know about yet?” Overbuying in one area can impact forecasts in another. Information delays could impact purchasing trends that in turn could hamper the forecasting of cash flow and accounts payable processing, ultimately costing millions of dollars.

The company had tried to solve the paper problem before, using laptop computers and virtual private network (VPN) connections to link buyers directly into the Oracle system. “None of those really stuck,” Mirro says. “The people who are really good buyers are very relational people. And typically they’re kind of low tech. That was the challenge—how do we take nontechnical people, give them a piece of high-end technology, and make it so easy to use that there’s a high adoption rate?”

Working with the Pioneers

The answer came with the arrival of user-friendly touchscreen tablet devices. “Typically apps are written for their ease of use,” Mirro says. “We turned to AT&T, the pioneers of a lot of mobile solutions. Rather than us going out and trying to find the right vendor that will work with AT&T and with Oracle, we asked AT&T to help us find the right solution.” Actsoft coupled with AT&T was the answer.

Anderson Hay utilized Actsoft Advanced Wireless Forms to create an electronic contract designed specifically for use on tablets. “It’s very easy to use. You point, select, and choose dropdown options and lists of values,” Mirro says, “so we can step the buyer through the process.” Now as soon as the buyer completes a contract, the farmer enters an electronic signature and the buyer presses “submit.“ The contract moves over the AT&T wireless network to the Actsoft server and then into the Oracle Purchasing and Oracle Inventory modules hosted by AT&T. Buyers’ trucks are equipped with printers and mobile hotspots so farmers get a printed copy on the spot.

Gone are the delays caused by mail transport, incomplete forms, and incorrect data entry. Completing a contract moves so quickly that buyers can enter 30 percent more useful data (such as import requirements), yet still save time. Mirro is tracking other performance indicators and sees the possibilities of increased improvement. “The delay from a contract being handwritten to being entered averaged 72 hours,” says Mirro. He estimates that once it arrived on site, each paper contract required a 30-minute review to ensure it was complete. Today, that review might take 30 seconds. “Now that it’s electronic, we are down to ten minutes end to end, fully validated and imported.”

Mirro has set a goal that 80 percent of his 18 buyers will use the tablet contract. The incentive to the buyers is the time saved, because they now can complete the deal onsite. “The buyers can enter a lengthy contract in five to ten minutes, inputting all the different fields, and get the signature of the vendor right then. It really improves their world,” says Mirro.

Indeed, improvements extend all across the Anderson Hay supply chain: from the growers who win faster confirmation of sales; to the managers matching supply and demand, cost, and sales price; and to the shippers and farmers who need the right fodder at the right place, and right on time.

This advertorial was originally published in the February 2014 edition of Profit.